Andrew Curry's blog on futures, trends, emerging issues and scenarios

The coming decline of London

So, by way of a thought experiment: what if London is about to peak? The reason would be the way housing provision and housing regulation had destroyed the economic balance of the city, and there are some serious warning signs. Recently, there’s also been a wave of commentary on this. But first, let’s just roll back to the ’70s.
When I moved to London in the late ’70s the city was regarded as being on the way down. Population was declining. People were moving out. The tax base was declining. And one of the consequences of that was that there was empty housing right across the city. (There was a similar story in New York).

Roll forwards to 2013. For a moment, let me leave to one side the social cleansing represented by the housing benefit cuts. the bedroom tax, and the unwillingness of the GLA to enforce its own affordable housing policy, and the long-term consequences that has for the lower-wage service workers on whom a city depends.

Parking the money of the rich

I started writing this post a couple of months ago, and recently there’s been several articles on London’s housing crisis. In the New York Times, Michael Goldfarb wrote about his middle-class London neighbours, moving out to to cities such as Bristol and Cambridge:

This is what happens when property in your city becomes a global reserve currency. For that is what property in London has become, first and foremost. The property market is no longer about people making a long-term investment in owning their shelter, but a place for the world’s richest people to park their money at an annualized rate of return of around 10 percent. It has made my adopted hometown a no-go area for increasing numbers of the middle class.

Or Ian Jack, on the way that housing prices are squeezing the middle class out of the inner city:

A report into Islington’s future published this month by Cripplegate Foundation concludes that its middle class will slowly disappear, leaving the population polarised between the very wealthy and the poor, with “a youthful transient and childless sector” somewhere in between.

And although it’s hard to find pity for high waged bankers who are still living very well off the taxpayers’ largesse, the recent reports that some would be looking for help under the government’s Help to Buy scheme because they couldn’t afford to live in the nicer parts of town was another symptom of the same trend.

Ghost towns

The absurdly ostentatious development represented by One Hyde Park encapsulates the problem, as Vanity Fair observed (interesting that there’s more coverage of this from New York than from London.)

“Those people who do buy these houses, particularly the bigger ones, in many cases don’t buy them to live in permanently: they are part of a portfolio,” said [the Chelsea Society’s Terence] Bendixson. “That doesn’t add much jollity to your street: houses with the shutters down and nobody there.” Edward Davies-Gilbert, of the Knightsbridge Association, sees the area gaining the flavor of “a ghost town, peopled by ghost blocks.”

Or another version in the same article, by the social commentator Peter York:

It’s absentee money: the kind of money that has bodyguards. … These people have no substantive relationship with anything British at all. It’s everywhere: I can’t emphasize enough how everywhere-ish it is.”

The data underline the gaps symbolised by One Hyde Park. The richest 10% in London are 270 times wealthier than the poorest 10%.

And in practice, there are similar, if less expensive, blocks of upmarket new property strung out across the centre of London, along with houses that are lived in for only a few weeks of the year. My twitter feed today mentioned a new development in still-not-that-fashionable Hammersmith offering a £5m penthouse, and with no affordable housing, neither built onsite nor elsewhere in the borough, because of the number of ways in which developers are allowed to weasel out of such commitments to the social needs of the city, while remaining behind the veil of “commercial confidence”. No wonder that the government felt the need to criminalise squatting, to protect absentee owners from any inconvenience.

‘Spaces for experimentation’

Several things are being squeezed out of the life of the city by this economic dominance. The first is urban innovation. An intriguing blog post by Alistair Livingston, reviewing a seventies book by Astrid Proll – exiled in London during the middle of the ’70s while on the run from the German authorities – quotes her as arguing that the 100,000 empty properties in London in the middle of the decade were “open spaces for experimentations of all kinds towards a life lived without economic constraint.”

In other words, and maybe it is worth spelling this out, they created spaces for public and social innovation which reinvigorated a city in decline. As I’ve written before, how this works is spelt out in Joe Boyd’s memoir White Bicycles, where he writes of the innovation in Notting Hill generated by those “open spaces” in the late 60s, from free schools to the Notting Hill Carnival.

Hollowing out the future

The second is the kind of governance that comes from people who believe that they are going to stay around an area for a while. A few years ago I did some work with an inner city London borough – not one of the poorest – and one of the concerns of the politicians in the council cabinet was that house prices had hollowed out the next generation of people like themselves who had a long-term commitment to the borough.

While such narratives can be driven by an over-developed sense of one’s own civic indispensability they seemed to be right; it was hard to see the next generation of aspirational professionals who would be able to afford to move into the borough in their 20s and stick there. Rosabeth Moss Kanter explained in her book World Class that one of the ingredients for urban and economic development is leaders who live and work in the location who are in it for the long haul.

Forty year cycles

I have a heuristic about public change which suggests it works on cycles of forty years and eighty years – crisis to crisis in four generations. The theory isn’t really there yet, though readers of the Fourth Turning will recognise the generational learning patterns that sit behind it. If so, London is halfway through that cycle at the moment, forty years on since the crisis of the mid-’70s.

Another rule of thumb is that there’s nothing so dangerous for a policy maker as a mental model that describes the world wrongly, certainly in the longer term. In Whitehall and City Hall, I suspect that there are policy makes who believe that London’s growth, and its attractiveness as a place to live and work, has been driven by the deregulation of the financial sector in the mid-80s. They’re looking in the wrong place. Loose housing, not loose money, is the ‘secret sauce’. And right now all of the housing trends are heading in the wrong direction.

The image of One Hyde Park is from the website of the project managers, Laing O’Rourke, and it is used with thanks.

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7 thoughts on “The coming decline of London”

Thanks Andrew. Very good and accurate, and spot-on about the surprising lack of reputational damage to soi-disant progressive architects.
As with climate change and societal ageing, this is the kind of problem that is all too easily suppressed in the minds of policymakers and media – too difficult, too long-term, too much of a challenge to existing policies, interests and ideological values. The problem is compounded by the appearances of endless prosperity and innovation in London: how can this not continue indefinitely, given the need of global plutocrats for investment havens, and given the inexhaustible grooviness of London? It is bubble thinking and it probably can’t end well.
Removing London’s status as political capital might help – we’re overdue for relocation of Parliament to somewhere like York or Birmingham. That won’t happen, but other things might: more alarm from business leaders about skills shortages and lack of social housing, or from Conservative council leaders in the city centre about the risk of their communities being hollowed out, for instance. (Kensington and Chelsea leaders have recently called a halt to local plutocrats building immense basement floors beneath their already huge and ultra-expensive houses – literally ‘hollowing out’ the foundations of the borough.) Best of all would be a punitive tax on absenteeism and empty properties, with the proceeds being channelled into social housing. That might happen – absentee plutocrats can buy politicians as well as houses, but they don’t have all the votes, and they aren’t popular.

Noticed that a few years ago, Vancouver was saying the same thing, that its best properties had become investments for the absentee Chinese. So maybe London will be for the rich and the tourists, with people from Birmingham hired in to act out local color.

On Fairshare Music, the artist Beans On Toast had this to say about London in an interview:

“Favourite city?

London. It’s been my home for 15 odd years now, so it’s home for sure. Although with the current wave of bulls*** ideas like banning busking in Camden, closing the skate spot on Southbank and unrealistic rises in rent makes me fear for London’s future.”

“The uprating of spaces and services in pursuit of this wealth thus damages and displaces the ability of the city to be a place for all people in which essential public services and spaces should be retained and paid for from the public purse.
A great change has thus occurred which doesn’t simply take us back to an Edwardian era of massive dynastic wealth and leisured elites but a city the logic of which is a new and diverse set of elites who are often not in and perhaps not for the city.”